MANEGERIAL REMUNRATION

Hi,

(d) any expenditure incurred by the company to effect any insurance on the life of, or to provide any pension, annuity or gratuity for, any of the company's directors and manager or his spouse or child.

Expenditure incurred on maintenance of vehicles would fall within the meaning of the expression 'remuneration' and once remuneration is fixed as provided under section 309 it is not possible to state that the expenditure incurred by the company on personal use of car by directors would not be allowable deduction. In so far as the company is concerned the expenditure is business expenditure, which could not be disallowed as such. [Sayaji Iron & Engineering Co. v CIT (2002) Comp Cas 675 (Guj)].

Total ceiling of managerial remuneration

Section 198(1) relates to overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. The total managerial remuneration payable by a public company or a private company which is a subsidiary of a public company, to its directors and its manager in respect of any financial year shall not exceed 11% of the net profits of the company for that financial year. Such net profits shall be computed in a manner laid down under sections 349 and 350, except that the remuneration of the directors shall not be deducted from the gross profits.

Remuneration is payable to all the directors including managing and whole-time directors and in any capacity. Therefore, it includes the remuneration for services rendered by him in any other capacity other than that of a director.

Regards

i jus wnt to know if a comany comes into profit 1st tym . n overall limit under schdule 13 is duly complied and CG approval has been obtaion in the form 25c . in that case  ihave to check the 198 and 349 working or not ????

if the appointment is made under section 269 then there are two ways of paying the remun.

as per schedule XIII or with the approval of CG???